The Treasury, in its infinite "wisdom", has sought to clarify its stance on retrospective taxation in the light of queries raised by the Treasury Select Committee following retrospective taxes being raised on Barclays and new variations of stamp duty land tax (SDLT) which are retrospective.
The Treasury said (as per Step Journal):
"The government agrees that changes to tax legislation where the change is to have effect from a date earlier than the date of announcement should be restricted to wholly exceptional circumstances. The government has made a commitment to this effect in the Protocol on unscheduled announcements, published in ‘Tackling tax avoidance’ at Budget 2011.All clear now?
By observing the Protocol, the government aims to strike the right balance between the rights of taxpayers affected by the change and the interests of the generality of taxpayers. In doing so we ensure that our response to avoidance risk is proportionate and limited to what is necessary to address that risk. The Forum of Tax Professionals review announcements as a standing agenda item at its regular meetings and provide Ministers with a view on how the Protocol is being observed in practice."
Would anyone care to define what "wholly exceptional circumstances" might actually be?
Tax does have to be taxing.
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